Yofi Grant, Chief Executive of the Ghana Investment Promotion Centre (GIPC), has staunchly defended the Centre’s recent decision to eliminate the capital requirement for foreign businesses.
Previously, under Section 28 of the GIPC Act, foreign investors entering joint ventures in Ghana were required to provide a capital investment of $200,000. Additionally, individual foreigners aiming to engage in retail business within the country had to present $1 million.
Speaking at the second Ghana EU Business Forum in Accra, Grant explained that the move is designed to foster a more competitive business environment and attract more investors to Ghana. “Firstly, there was a conceptual misunderstanding because that money remains the company’s money; it is not deposited anywhere. According to our records and the research we have conducted, nearly every foreign investor entering this market ultimately brings more than $500,000,” he said.
He further elaborated on the psychological barriers imposed by the capital requirements, particularly for small and medium-sized enterprises (SMEs) and small and medium industries (SMIs) involved in joint ventures. “Therefore, this requirement should not have been an issue. However, it still poses a psychological barrier, especially when dealing with SMEs and SMIs in joint ventures. For instance, in a 50-50 joint venture, if the foreign partner must contribute at least $200,000, the local investor is also expected to match that amount. Unfortunately, many SMEs lack the necessary capital to invest in their businesses,” Grant added.
Despite Grant’s defense, some local trading groups have criticized the review, describing it as retrogressive and harmful to Ghana’s trading community. They argue that the policy change could lead to foreign, particularly Asian, dominance in local retail businesses.
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